Hi, I need a suggestion! Can we reduce the PF contribution to the limit of 15000/- , where currently we making the contribution on more than 15000/-; Employee and employer share both . For ex- if currently we are doing the PF calculations on 20000/- , now can we reduce the amount to 15000/-. Is this allowed as per the act.
Please give ur inputs .
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Yes, you can do it provided your contribution is on a salary which is not less than Rs 15000. If you have been deducting PF on Rs 20000 and now decide to change the PF contributing salary to an amount less than Rs 15000,say, Rs 12000, then it will be violation of section 12 of the EPF & MP Act which says that employer should not reduce the salary for want of reducing his contribution to PF. However, since the PF authorities cannot DEMAND a contribution on any salary above Rs 15000, a reduction in PF contributing salary upto Rs 15000 is permissible. This was clarified by Supreme Court in Marathwada Gramin Bank's case.
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